Bigger Default

I read a report that states there will be bigger defaults by IL&FS in October 2019, which would be to the tune of 91,000 crore. I want to know what will its effect be on MFs? Will there be dividends?

-H Chandra Gupta

Editor Responds:The figure you are quoting is the group's total debt as of the end of October 2018, which will become overdue to different lenders over the period. The government has already appointed a new board that is trying to resolve the issue in a way that will have minimal impact on the financial markets. Funds that have invested in IL&FS papers will definitely get adversely impacted. Dividend by a fund house is never guaranteed and are not fixed returns and hence it depends solely on the fund house, whether they want to distribute dividends.